University wants £1,381 back from each of us after a gov-funded project — do we have to pay? England

a group of under 15 students worked on a government-funded cybersecurity project at our university (Oct 2025 – Mar 2026), paid through an external payroll company.

The situation in one line: weeks after the project ended, the uni says the payroll company accidentally paid us their admin costs too, and wants £1,381 back from each of us.

Timeline:

Feb–Mar: received 5 payments, ~£3,400 net

(gross £3,616, NI £217 deducted at source)

28 Mar: project concludes

30 Mar: uni asks us to confirm payment amounts — we reply honestly, get a positive response

Mid Apr: uni found out there’s been an error

23 Apr: we are informed of the error and told to repay £1,381 each

Questions:

1.	Do we legally have to repay this given we acted in good faith?

2.	Does “change of position” apply here?

3.	Does the recorded admission of late discovery help us?

4.	Can the uni withhold graduation over a disputed debt?

5.	What should we do while waiting for their legal team?

Thanks in advance.